6 Things You Need to Know About User Retention in Mobile Games and Apps

This week we have a guest post about mobile user retention from our friends at devtodev. Ms. Vera Karpova is an analyst at devtodev – a full-cycle analytics solution for game developers. She has spent more than 5 years analyzing miscellaneous monetization models in mobile games and apps. She’s been a speaker at various international conferences and also conducted and evaluated more than 50 marketing experiments.

User Retention in Mobile Games and Apps

Retention is one of the metrics that gives you the keystone. It’s one of the most important metrics to track in games and apps. It defines the size of your audience, and lets you know if your project has any growth capacity, while also informing you about the average time that users spend using your app — all of which directly influences your revenue.

What is Retention?

For your project to become profitable, you need to have users that pay. In order to have paying users, you need to have an audience that doesn’t mind opening their wallets. Therefore, you need new users who love the project and play your game or users that use your app for a long time.Retention defines the percentage of users that return. It’s calculated for your user base on a particular day from the moment of the installation. It shows the percentage of users who launched an app on the Nth day after installing an app. Here’s the formula:

Day N Retention = Number of users that launched an app on Day N / Number of users who installed an app N days ago x 100%

Usually, the biggest churn happens during the first few days, after installing an app. After that, retention decreases more slowly. So, if your players launch the game at the end of the month, it means that they are going to stay with you for a longer time.

Here’s how a typical retention graph looks like:

When Should You Measure Retention?

Usually, retention isn’t measured on a daily basis. The most common days are Day 1, Day 7, and Day 28. Traditionally, good retention rates are:

Day 1 Retention – 40%

Day 7 Retention – 20%

Day 28 Retention – 10%

Day 1 Retention informs you about the first impression that users have about an app — how they like the interface, how convenient it is and if it corresponds to their needs and expectations. Moreover, Day 1 Retention influences the following days’ retention. That’s why this indicator is so crucial. You need to make sure that your users’ first impression is unforgettable. They need to get to know the product and understand its value and advantages. This is called onboarding.

From now on, your users are immersed in the project and their path should look like this: Installing an app » Onboarding » Coming back » Making payments

You need to hook users during the first session in order to get money out of them. Analyzing and adapting the FTUE (First Time User Experience) is a great place to start.

Day 7 Retention tells you how much your users like your game, or app, as they get to know it better, after a week.

Day 28 Retention shows the percentage of users who got used to your app and have been using it with some frequency. They will become loyal users and stay with you for a very long time. Moreover, if users are playing your game longer, there’s a higher probability that they’ll pay.

Ideally, an app should become a part of user’s life. At the same time, retention really depends on the genre. For example, you check your accounts on social networks several times a day, but without a doubt, you order a taxi and book hotels much less frequently. Therefore, the retention rates of those apps will be different. Depending on the type and function of the app, you’ll need to determine which one of them you need to track.

When Should you Track Retention on an Hourly Basis?

Another approach to tracking and calculating retention is to track it hourly instead of daily. It means that Day 1 Retention will be a percentage of users who came back within 24-48 hours from the install.Here’s how it might look in analytics systems such as devtodev:

Let’s see how it influences the result. Red dots are user sessions on the scale below. If we calculate retention by calendar days, your users are considered back on the 1st, 2nd, 4th days from the install date. But if we track it on an hourly basis, the first two sessions will be happening on the same day. In this case, the user will be considered to be back on the 1st and 3rd days from the moment of the install.

This calculation makes sense if your users are spread within different time zones and their calendar day obviously doesn’t start at the same time. In this case, for example, traffic growth in one country may change the retention of the first few days and lead to false conclusions. As an additional bonus, such a method helps in calculating another metric: Day 0 Retention. It shows if users launch an app on the same day of the install.

How Does User Segmentation Influence Retention?

The behavior of users that come from different sources, countries, platforms, etc., will vary. Segmentation allows you to sort these differences out. Then you’ll be able to evaluate the most effective traffic sources. Due to different demographics, your users have different expectations which influence your app’s retention. You can use this data in order to change your target audience for ads, or to change your app’s positioning. By the way, you can find more info about segmentation in the Lecture 6 of our free online course in game analysis.

Why Do You Need to Track and Increase Your Retention Rates?

As we mentioned before, retention is one of the most important metrics. But what’s so special about it?

Retention influences the size of your audience. Your churn rate has to be smaller than the number of new users. Ergo, your retention rate is in the black. If there are new users who don’t continue using your app, it won’t have a consistent audience. In this case, you most likely have only new users that don’t stick around. Ergo, monetizing your project will be challenging, and you risk being in the red.

Retention influences your revenue. So it means that the longer users stay with you, the more loyal they become, and the more likely they’ll pay. If your app has some built-in microtransactions, the longer your users stay, the more payments they’ll make.

Also, you need to compare retention across different demographics. This way you’ll be able to evaluate changes that you’ve made in your app and how it influenced your users.

Retention helps you calculate Lifetime and Lifetime Value. (LTV = ∑ retention x ARPDAU). These are vital metrics for any project. They define the app’s success, allow you to determine the most effective sources of user acquisition and find the most attractive user segments or demographics.

How Can You Improve Your Retention Rate?

There are several options what you can do in order to improve your retention:

Work on your first session and FTUE. They define the future behavior of users. This is your moment to ensure that users understand your game in a nutshell. A well-developed tutorial will help better your FTUE and show all your best features.

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